The fact that adding a child to a parent's auto insurance policy comes at a significant financial cost can amplify the anxiety that a parent already has when their teen gets behind the wheel.
Even with the high costs associated with teenage drivers, doing some comparison shopping can make a significant difference. We ranked the major insurance companies based on pricing, the number of customer complaints, and the quality of the collision repair services they provide in order to assist parents in their search for the most affordable auto insurance for their teenagers.
Best Cheap Car Insurance for Young Drivers
Nationwide
There are numerous useful add-on coverages that can be purchased through Nationwide, in addition to auto insurance rates that are acceptable for certain categories of drivers. Because the number of complaints lodged against them for auto insurance is so low, you should consider looking into this company if you are in the market for auto insurance. Notably, drivers who want to potentially cut their rates depending on the amount of real driving they do can take advantage of both a usage-based insurance program as well as a pay-per-mile option through Nationwide.
American Family
The premiums for American Family are more than the national average, but the policy is still interesting to consider because it comes with a variety of add-on features and discounts, including decreasing deductibles and accident forgiveness. Another advantage of American Family Insurance is that it receives a relatively low number of car insurance claims each year.
American Family auto insurance covers the forms of standard primary coverage options: collision, comprehensive, and liability.
- Property damage and bodily injury liability auto insurance cover the costs of other people's damaged property and injuries if you cause an accident. Your liability insurance may also cover attorney fees, settlements, and judgments against you if you are sued.
- Uninsured motorist coverage pays for medical fees if you or your passengers are injured in an automobile accident caused by an uninsured driver (or has too little to cover your bills). In 22 states, uninsured motorist coverage is compulsory, and often has the same coverage limits as your liability insurance.
- Medical payments: This coverage helps pay for injuries sustained by you or your passengers in an auto accident, regardless of responsibility. It is mandatory in certain states but optional in others.
State Farm
For safe drivers, State Farm offers very inexpensive auto insurance prices. Only Geico has lower national average prices for drivers with a clean driving record, among the leading insurance providers we studied. If you have a clean driving record and are looking to compare prices from several insurers, these two insurance firms are an ideal starting point.
State Farm has some of the most affordable typical auto insurance rates for drivers who receive a speeding ticket. State Farm's prices for this type of driver are second only to Geico's, and the difference between the two is only $28 on average.
Ensure that you receive all discounts for which you are eligible when requesting insurance quotes in order to help offset the rate rise for speeding.
Geico
Geico offers very competitive vehicle insurance prices for a variety of driver profiles, making it a viable option for those seeking affordable auto insurance. Geico's low number of auto insurance claims is another reason to select the company.
Geico offers the most affordable average rates for safe drivers compared to its competitors. Since drivers with a recent clean driving record are less likely to make claims than drivers with at-fault accidents, speeding fines, and other blemishes on their records, they typically receive the best auto insurance prices.
Geico average auto insurance premiums for drivers with a speeding citation are the lowest among the firms we evaluated. Geico raises auto insurance premiums by an average of nearly $400 for a speeding ticket. This is a greater average rise than some of the other insurers we examined, but Geico still offers the most affordable rates overall.
USAA
USAA has relatively inexpensive rates for drivers with a variety of driving records, making it an excellent choice for a variety of driver profiles. To be eligible for USAA insurance, you must be a service member, veteran, or military family member.
USAA provides the lowest average auto insurance premiums for safe drivers compared to leading competitors. Only Geico comes close to offering the lowest rates for responsible drivers.
If you have a spotless driving record and you're shopping for auto insurance, USAA and Geico are ideal places to start. Note that USAA insurance is exclusive to active-duty military personnel, veterans, and their families.
Reducing the Costs of Insurance for Teen Drivers
There is no way around a sizeable hike in premiums when you add a teenage driver to your auto insurance policy, but there are things you can do to reduce the impact on your finances as much as possible.
Don't drop your teen from your insurance coverage.
It is important for parents who are shopping around for the most affordable vehicle insurance to be aware that it is typically more cost effective to insure a teen driver under their own family's policy rather than having the youngster purchase their own coverage. If you are unsure, though, you can request that your insurance agent run quotations for both potential outcomes or you can compare prices online to determine the total cost of two distinct policies. Since getting quotes does not cost anything, there is no cost associated with determining which method is the most cost effective.
Ensure that you are receiving appropriate discounts.
Common discounts that apply to teenagers include "excellent student" discounts, which are often given to kids with a grade point average of B or higher, and "student away at school" discounts, which are given to college students. You may be eligible for a reduction in the cost of their rates if the kid attends school more than 100 miles away from home and does not have access to a vehicle.
In addition, insurance programs for teenage drivers may offer a reduction in premiums on addition to instructing teenage drivers in safe driving practices. Your family's financial future will be protected if you can keep your teen's driving record accident-free.
Comparison shop
Now is the time to shop around for vehicle insurance, especially if it's been a few years since you did so. Compare different estimates to find the best deal. For instance, for a policy with typical coverage of $100,000 in bodily injury liability coverage per person and $300,000 in total accident liability, the rates for two parents and one 16-year-old ranged from nearly $2,000 a year (USAA) to over $6,000 a year (Nationwide and Kemper) in California among the companies that we researched and analyzed. This was the case for an insurance policy.
Wait it out
Around the age of 25, drivers often begin to see a decrease in their car insurance costs. Check out Forbes Advisor's breakdown of how much you pay for auto insurance based on your age and gender.
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